A Trial Balance Off by $860: Journalizing a Pet Grooming Salon's First Month, Posting to the Ledger and Tracing Three Posting Errors That the Usual Shortcuts Could Not Find
[Student Name]
University of Phoenix
ACC/290: Principles of Accounting I
Week 2 Exercise
[Instructor Name]
[Date]
The business and all figures are a composite written for a model exercise.
A groomer opened a composite pet grooming salon as a sole proprietorship in June. At month-end, her part-time bookkeeper prepared a trial balance, and the columns did not agree: debits totaled $38,150 and credits totaled $39,010, a difference of $860. The bookkeeper tried the standard shortcuts, and none of them worked, because the difference was not one error but three. This exercise records the month correctly and then finds what went wrong.
Step 1: Journal Entries
Each transaction is analyzed for the accounts affected and recorded with equal debits and credits (Weygandt et al., 2021).
June 1: The owner invested $20,000 cash. Debit Cash $20,000; credit Owner's Capital $20,000.
June 2: Purchased grooming tables, tubs and dryers for $12,400, paying $4,400 cash and signing a note for $8,000. Debit Equipment $12,400; credit Cash $4,400; credit Notes Payable $8,000.
June 3: Purchased grooming supplies on account, $1,560. Debit Supplies $1,560; credit Accounts Payable $1,560.
June 3: Paid June rent, $2,200. Debit Rent Expense $2,200; credit Cash $2,200.
June 1 to 30: Grooming services for cash customers, $6,850. Debit Cash $6,850; credit Service Revenue $6,850.
June 30: Billed a boarding kennel for grooming its guests, $1,900. Debit Accounts Receivable $1,900; credit Service Revenue $1,900.
June 15 and 30: Paid wages, $3,100. Debit Wages Expense $3,100; credit Cash $3,100.
June 20: Paid the utility bill, $450. Debit Utilities Expense $450; credit Cash $450.
June 28: Collected $1,200 from the kennel. Debit Cash $1,200; credit Accounts Receivable $1,200.
June 29: The owner withdrew $1,000 for personal use. Debit Owner's Drawings $1,000; credit Cash $1,000.
June 30: Paid $700 on account to the supply vendor. Debit Accounts Payable $700; credit Cash $700.
Step 2: Correct Ledger Balances
Posting each entry to its ledger account gives these June 30 balances. Cash: $20,000 minus $4,400, $2,200, $3,100, $450, $1,000 and $700, plus $6,850 and $1,200, equals $16,200. Accounts Receivable, $700. Supplies, $1,560. Equipment, $12,400. Accounts Payable, $860. Notes Payable, $8,000. Owner's Capital, $20,000. Owner's Drawings, $1,000. Service Revenue, $8,750. Rent Expense, $2,200. Wages Expense, $3,100. Utilities Expense, $450.
Step 3: The Correct Trial Balance
Debit balances: $16,200 plus $700, $1,560, $12,400, $1,000, $2,200, $3,100 and $450, a total of $37,610. Credit balances: $860 plus $8,000, $20,000 and $8,750, also $37,610. The trial balance ties.
Step 4: Why the Shortcuts Failed
Two shortcuts are commonly used to locate a single error. If a debit was posted as a credit, or the reverse, the difference will be twice the amount, so dividing the difference by 2 suggests the amount to look for. If digits were transposed, such as 56 recorded as 65, the difference is always divisible by 9. The bookkeeper's difference of $860 gives $430 when divided by 2, and no transaction was for $430; $860 is not divisible by 9. The shortcuts failed because they assume a single error. When several errors combine, the difference is their net effect, and the only reliable method is to retrace the postings.
Step 5: Tracing the Errors
Comparing each ledger account with the journal revealed three posting errors.
First, the supplies purchase of $1,560 was posted to the Supplies account as $1,650, a transposition, overstating debits by $90.
Second, the utility payment's credit to Cash was never posted, so the Cash balance was $16,650 instead of $16,200, overstating debits by $450.
Third, the $700 payment to the supply vendor was posted to Accounts Payable as a credit instead of a debit, making the balance $2,260 instead of $860 and overstating credits by $1,400.
The net effect: debits overstated by $540 and credits by $1,400, so credits exceeded debits by $860, exactly the difference in the bookkeeper's trial balance. After correcting all three postings, both columns total $37,610.
Step 6: What the Trial Balance Cannot Catch
A trial balance that ties is not proof that the records are right. Suppose the owner's $1,000 withdrawal had been recorded as Wages Expense. Debits and credits would still be equal, and the trial balance would tie, but expenses would be overstated and net income understated by $1,000. Errors of this kind, in the wrong account, omitted entirely or recorded twice, are found only through review of source documents, bank reconciliations and comparison with expectations. Owhoso et al. (2002) found that reviewers with experience in a specific industry detected more mechanical and conceptual errors in audit work than reviewers without it, a reminder that knowing what the numbers should look like is itself a control.
Why Double Entry Works
Double-entry bookkeeping, whose origins Sangster (2016) traces to the merchant practices taught in late medieval Italy and set out in Luca Pacioli's 1494 treatise, records every transaction in at least two accounts with equal debits and credits. That structure is what makes a trial balance possible and what made the errors in this exercise detectable at all.
Conclusion
Recording the salon's first month correctly produced a trial balance of $37,610 on each side. The bookkeeper's version was off by $860 because three posting errors, a transposition, an omitted credit and a debit posted as a credit, combined into a difference that no shortcut could explain. Retracing the postings found all three, and their net effect matched the difference exactly. The trial balance proves only that debits equal credits, so review against source documents remains necessary.
References
Owhoso, V. E., Messier, W. F., Jr., & Lynch, J. G., Jr. (2002). Error detection by industry-specialized teams during sequential audit review. Journal of Accounting Research, 40(3), 883-900. https://doi.org/10.1111/1475-679X.00075
Sangster, A. (2016). The genesis of double entry bookkeeping. The Accounting Review, 91(1), 299-315. https://doi.org/10.2308/accr-51115
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2021). Accounting principles (14th ed.). Wiley.
How this ACC 290 Week 2 example is structured
The ACC/290 shelf page describes Week 2 as drilling journal entries, posting and a trial balance that has to tie. The exercise works the full cycle for one month and then deliberately examines a trial balance that does not balance, because finding errors teaches the logic of double entry better than recording transactions correctly the first time. Every entry and balance is shown so the reader can check each step. Students search this week as ACC 290 Week 2, ACC290 Wk 2 or ACC/290 Wk 2; all three are the same assignment.
ACC/290 Week 2 questions, answered
What does ACC/290 Week 2 usually ask for?
The ACC/290 shelf describes Week 2 as drilling journal entries, posting and a trial balance that must tie. Many sections assign problems in which students journalize transactions, post them to T-accounts or ledgers and prepare a trial balance.
What is a trial balance?
A list of every ledger account and its balance at a point in time, with debit balances in one column and credit balances in another. If the totals are equal, debits equal credits in the ledger, though some errors can still exist.
What errors will a trial balance not reveal?
Errors that affect debits and credits equally, such as recording a transaction in the wrong account, omitting a whole transaction, recording it twice or recording both sides with the same wrong amount. The trial balance only proves that debits equal credits.
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